LightSquared Makes Inmarsat Payment to Win Time for Talks

By Jonathan Browning -
Apr 20, 2012

Philip Falcone’s LightSquared Inc.
made an outstanding $56.3 million payment to Britain’s Inmarsat
Plc (ISAT) related to a spectrum-cooperation accord and was granted an
extension on further installments, gaining more time to win
approval from U.S. regulators for a wireless service.

The broadband venture won’t need to make any additional
payments until April 2014 as part of the new agreement,
Inmarsat, the biggest provider of satellite services to the
maritime industry, said today in a statement. LightSquared will
no longer be in default, it said.

Under the companies’ agreement, Inmarsat is giving
LightSquared access to part of its spectrum. LightSquared,
majority-owned by Falcone’s hedge fund Harbinger Capital
Partners, is struggling to get approval for a wireless service
after the U.S. Federal Communications Commission said it will
block the venture because of potential signal interference with
global-positioning systems. Falcone has invested about $3
billion in the plan to build out a high-speed data network.

Inmarsat gained as much as 4.9 percent to 442.3 pence in
London trading and was up 2.8 percent as of 10:34 a.m.

“The deployment of the LightSquared network remains a
substantive revenue opportunity for Inmarsat,” the British
company said today. “This amendment is in the best interests of
Inmarsat’s shareholders.”

Inmarsat earlier this month had said that further payments
were “highly uncertain.” The amended agreement allows time for
LightSquared, based in Reston, Virginia, to win regulatory
approval, Inmarsat said today.